(Reuters) - Arca Capital, a top shareholder in AmTrust Financial (AFSI.O), on Wednesday joined activist investor Carl Icahn in opposing the U.S. insurer’s deal to be taken private.
The Czech-based investment company, which holds a 2.4 percent stake in AmTrust, urged shareholders to vote against the deal, citing “absurdly low valuation” of $13.50 per share.
Arca said the privatisation is coming at a “turnaround” time for the company, and if approved, “would allow the (founding) Zyskind/Karfunkel family to exclude minority shareholders from realizing future gains.”
The company also cited a report from proxy adviser Institutional Shareholder Services (ISS), published on May 25, which said the valuations implied by the merger are below where the insurer’s peers currently trade.
AmTrust did not immediately respond to a request for comment.
On March 1, AmTrust said it would be acquired in a $2.7 billion (2 billion pound) deal by a group of shareholders including its founding family, chief executive officer and private equity funds.
Icahn earlier this month disclosed a 9.4 percent stake in the company and filed a lawsuit against AmTrust and the family that controls the company, accusing them of trying to take the insurer private at the wrong time and at the wrong price.
Arca Capital on Wednesday also demanded that AmTrust Chief Executive Officer Barry Zyskind and George and Leah Karfunkel of the controlling family publicly defend the privatisation plan.
Reporting By Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila